CMS is Leading the Way Towards Bundled Payments. Should It Be?

Before he became head of the Department of Health & Human Services (HHS), Tom Price, MD, said the architects of a planned mandatory bundled payments program were “experimenting with Americans’ health.” In 2016, CMS, the most robust arm of the department, had issued such a plan, which required certain cardiac and orthopedic interventions to be performed within parameters designed to level outcomes and mitigate costs. It was exactly what Price did not want to see. He resigned before he could undo the program but delayed its implementation before it was canceled last December. In its place rose a similar initiative, comparable with the first in almost every way save for the inclusion of a few outpatient procedures and the nature of participation: The new Bundled Payments for Care Improvement Advanced (BPCI Advanced) plan, unveiled in January 2018, is entirely voluntary.

A day before, JAMA published a study examining voluntary bundled payment pilot programs. Although some produced stellar results—previous work showed an average savings that exceeded $1000 per joint replacement with outcomes unchanged—they also struggle to get off the ground. Only 12% of eligible hospitals joined, almost all of which were in cities. The programs also suffered attrition: More than half of hospitals had abandoned the program in some way, and a fifth stopped participating altogether.

CMS has not given up on bundled payments. They are a key element in the value-based care movement: pay for a total episode of care as a single unit (instead of a series of procedures and visits) while maintaining positive outcomes. The federal government has been the key driver.